Analysis: BNSF to emerge as major project cargo player

Thursday, January 10, 2013

BNSF began the year with a big entrance into the worldwide project cargo space with the acquisitions of Toronto-based Albacor Shipping and Texas-based EP-Team.
Albacor, which primarily deals with project cargo on the surface-transport side of the equation, will give BNSF an entre into Europe and Russia, while EP-Team will strengthen the company’s express air freight activity.
“Both were companies that we recognized in the marketplace for their niche markets, and both provide services in areas that were not part of the BNSF portfolio,” BNSF Chief Marketing Officer Jim Craig told American Shipper.
Albacor and EP-Team, he said, will remain somewhat separate from BNSF, because Craig wants them to continue to do what they do best on their own. Neither of their brands will change — except for a logo update to incorporate the BNSF logo — and the senior management from both firms will stay in place. But there is one big change, he said — the companies will now have more money behind them when pursuing new projects.
“A lot of these project cargo activities require some significant financial investment on the front end, so they would shy away from some of these big global projects,” Craig said. “Now with our backing, they can get in there and compete with the major players.”
BNSF has been experiencing double-digit growth for the past few years, Craig said. The company’s organic growth is strong and is supplemented by acquisitions when, as Craig put it, the firm can move into a new market with a single swipe of the pen instead of years of infrastructure building.
While the company has significant project cargo activity over its rail lines in the United States, officials had been looking to take a bigger chunk of what it sees as a fragmented industry worldwide. Craig added that the project cargo sphere is ready for a major U.S. player with global reach, something the market has been missing until now.
“Over the next 20 years, as emerging economies build up and established economies refurbish their aging infrastructure, there’s going to be a lot of need to move a lot of machines and components around the globe,” he said.
BNSF has already hit the ground running. Thursday morning, Craig was in Washington, on his way to the site where EP-Team would load a satellite destined for South America in the cavernous hold of an Antonov aircraft.
“That’s some of the cool stuff they do that BNSF hasn’t done in the past,” he said. - Jon Ross